If you are planning to launch, a startup business of your own just makes sure you do not commit the mistakes that are commonly seen among amateur entrepreneurs. In this write-up, let us find out the most committed legal errors that small or medium and growing business entities are seen to make.
It is usually seen that the mistakes that you will find below are during the initial phases of company formation. While dealing with the workforce, few mistakes are committed as well.
John Giorgi Highlights the Legal Mistakes to Avoid While Starting a New Company
Check these out in the points below-
Not Defining a Clear Deal with Partners or Co-Founders
When you are starting a business and you have partners in the venture too, all the co-founders must agree to the terms and conditions that have been laid down. If one of the members disagrees with any such term or condition, it might pose to be a problem soon. And it can end in legal trouble for all the others.
Selecting a Name for the Company
When you are selecting the name for your new business, make sure you do extensive research so that you can keep at bay any kind of infringement or legal problems related to the domain name.
It is quite likely that you could be violating copyright issues or using someone else’s trademark. Carry out a Google search or you can also check the U.S Patent and Trademark Office’s website for trademark registrations. Seek assistance from the intellectual property lawyer for the same.
Skipping Tax Considerations can be Disastrous
John Giorgi says if you do not plan your tax liabilities or any unanticipated tax issues while forming the company, you could end up paying penalties for the same.
You could get a Tax ID for your company. This you must obtain from the IRS or Internal Revenue Service. This is like a social security number and is also called EIN or “Employer Identification Number”.
Depending on the type of business you are planning to start, you could be entitled to tax incentives. This can be in form of renewable energy tax credits or investment tax credits.
The Biggest Mistake
It is generally seen that one of the gravest mistakes that founders of new businesses make is to not seek assistance from good legal counsel. John Giorgi points out that in several instances, it has been seen that many startup businesses in order to save taxes and cash, end up hiring inexperienced and the wrong legal counsel.
However, this is a wrong move that they make and if they can pay the right fee to the right legal person, they could save themselves from a lot of legal hassles in the future. One of the best ways to zero in on the right legal person is to interview as many as you can and hire someone that has experience in dealing with startups and the associated legalities.